Tag Archives: Cryptocurrency

Dollar Cost Averaging With Cryptocurrency

Dollar Cost Averaging With Cryptocurrency

This article is really about Dollar Cost Averaging (DCA) and how it relates to investing money into cryptocurrency. DCA is an investment philosophy, well known to equities investors. It became a hot investment topic when the general public began to learn about mutual funds back in the 80’s.

I first heard about DCA in the late 80’s when I was a licensed seller of mutual funds with the A.L.Williams Company, the originator and pioneer of the “Buy Term and Invest The Difference” personal financial planning philosophy.

One highly reputable mutual fund which we sold at that time was the Templeton family of funds. Sir John Templeton is now deceased but he was one of the original pioneers of smart mutual fund investing. His company was very successful… partly because it wasn’t even headquartered in NYC so his research was always more independent.

In fact, his company was one of the first mutual funds which diversified internationally. He was very innovative and somewhat contrarian for his time but he had a highly respected reputation as an investor, businessman, and philanthropist.

His company later merged with Franklin Funds and is now known as Franklin Templeton Funds.

DCA was one of a three part investment strategy which has pretty much always been effective for those who have followed it. The three parts of the strategy are:

  1. Diversify

  2. Invest Long Term

  3. Dollar Cost Average

Assuming you know what mutual funds are, you’ll know that many funds are diversified. You’ll also know that most people who hold mutual funds do so for the long term. But you might not know about DCA.

DCA always works….in a rising market. It does not work in a consistently falling market (unless you’re looking for tax write-offs). It does not so much ensure a profit (at least not in traditional equities) but it does protect against a significant loss.

Little blips in the market don’t matter. In fact, they’re expected. But any problem with minor downturns is always negated by a long-term perspective — in a rising market.

The key to making DCA work is to invest a consistent amount of money at regular intervals. Using equities as an example: Investing $100 @ month, the investor gets 4 shares when the shares sell at $25 each. But if the price of the stock goes down to $20 he/she gets 5 shares. Which is better in the future? 4 shares or 5 shares?

But what about if the price of the share goes up, i.e. it costs more. For example, $33 @ share. That means that the investor still invests $100 but now only gets 3 shares instead of more. That’s still OK because if the market is rising, it’s still a good investment.

As an example, I sold a program of just a small amount of money invested in one of the funds to my pastor back in Galveston, TX. A couple of years ago when I touched based with him (he’s now retired) on the phone, he said to me, “Art, I’ve got to thank you for something.”

I of course had no idea what he was talking about. But he proceeded to tell me that he had maintained that investment program in his Templeton fund for a long time. And he told me it had turned out very well for him.

That’s the proof of the pudding for Dollar Cost Averaging.

So how does that relate to Bitcoin and cryptocurrency?

It means simply that most people need not worry about ‘technical trading’ in their cryptocurrency part of their portfolio….unless it’s something they just ‘get off’ on. And, make no mistake about it. There are lots of people who ‘Day Trade’ in cryptocurrencies. But day-trading is not for the average person.

But for the average person, long-term investing of tolerable amounts of ‘money’ in cryptocurrency carries not only minimal risk but also relatively assured capital preservation and upside potential.

Certainly getting in on a coin launch at 10 cents @ coin is a great opportunity when the coin launches at $1 and is reasonably expected to appreciate rapidly thereafter. But even if you have to get ‘in’ at $1 or $2, that’s still a good deal if the coin appreciates rapidly.

Cryptocurrency is an investment but it’s a very new kind of investment. In my opinion, it only barely falls with the traditional definition of “investments” (mostly because it’s not something tangible like a stock certificate, bond, deed, or other better-known type of investments). But again, ‘money’ isn’t really what most people think it is any more,is it?

Investing is not gambling. Gambling is putting money at risk by betting on an uncertain outcome with the hope that you might win or make money.

However, at this point in time putting some money into a reputable cryptocurrency, in whatever amount is comfortable to you, is not a gamble. The existing growth charts, when combined with prudent research and due consideration, definitely make Bitcoin, and many reputable altcoins (such as MyCryptoCurrency), a wise investment and almost immeasurable risk.

Just ‘play’ it wisely by Dollar Cost Averaging. Or put a lump sum into it and set your alarm to come back and check it in a year or two. And don’t think you’re going to be a ‘trader’ if you’re not already one. You don’t need to do that… to win your game.
 

Art Williams
Freelance Copywriter
Case Studies and eMail Copywriting
eMail Me

 

Bitcoin Advocates Close To Trump

Bitcoin Advocates Close To Trump

President-elect Donald Trump has brought at least three individuals into his new administration who are publically pro-bitcoin. Who are the individuals and what makes them interesting?

They are:

  • For the position of US Director of Office of Management and Budget, Trump appointed US Congressman Mick Mulvaney, a Tea Party Republican, a hardline fiscal conservative known as being very outspoken about drastically cutting  federal spending on social programs. Mr. Mulvaney is also a founding member of the bipartisan Blockchain Caucus, aka the "Bitcoin Caucus" whose purpose is to help congress remain current on crypto/blockchain technologies and currency, and how to develop policies to advance them. He is also a very outspoken advocate of abolishing the Federal Reserve.

  • Peter Thiel, one of the original founders of PayPal, vocal bitcoin advocate, and outspoken gay billionaire has been offered a position on Trump’s transition team executive committee but has yet to accept. Nevertheless, the offer shows that Trump is not shy about bringing bitcoin advocates into his administration.

  • Betsy DeVoss, daughter-in-law of Amway co-founder Rich DeVoss, has been picked by Trump to be Secretary of Education but has yet to be vetted and approved by the appropriate congressional committee. Her position on bitcoin is unknown but it might be assumed that being closely associated with Amway she might be pro bitcoin. Ironically… her kids go to private schools but considering that she has always been an advocate for quality education she might possibly be presumed to be pro bitcoin.

  • Texas Governor Rick Perry, an outspoken advocate for bitcoin, has been nominated for Secretary of Department of Energy and is awaiting congressional confirmation.

A few other prominent politicians who have in recent years spoken positively about bitcoin include:

1. Jared Polis

A US congressman known for saying that the US dollar should be banned instead of bitcoin.

2. Dan Elder

A candidate for US House of Representatives in 2016 famous in the bitcoin community for funding his campaign solely by bitcoin and stating that bitcoin would be a way to bring integrity back to the notion of money.

3. George Galloway

A British politician and mayoral candidate in London noted for pledging to run his campaign budget  on MayrosChain, a blockchain-based  public expenditure management system. He stated on his funding page:

“Now, for the first time, the radically disruptive technology of blockchains can provide a technological backbone for true, 100 percent transparency. Political accountability, it seems, is about to take on a whole new meaning."

4. Andrew Hemingway

Andrew Hemingway, a Republican who ran (unsuccessfully) for New Hampshire Governor in 2014 and spoke once about using blockchain tech for elections.

5. Gulnar Hasnain

Over in London again, Gulnar Hasnain, a Green Party candidate running for a local government position, became noted for taking donations via bitcoin and also an alt coin called Onename, and a micro-tipping tool called Change Tip (recently closed).

In this interesting Youtube video, she shares her evolution into a bitcoin advocate.

She once said in an interview that she would like to draw attention to the positive aspects of blockchain technology and its potential to “transform democracy worldwide” and added that there were many similarities between her party and the principles of distributed ledger technologies.

She further added, “Surprisingly, the Green Party is vocal on the same issues as the bitcoin movement – more decentralised power, smaller government, a need for a shift in the concentration of power in the banking system and a more inclusive society.”

6. Rand Paul

Back in the US, everybody knows Ron Paul’s son, Rand Paul, a noted Libertarian who currently serves as Kentucky as one of its two Senators. He accepted bitcoin donations during his brief, unsuccessful campaign for US Republican Presidential nominee.

Kentucky Senator Rand Paul, who officially announced his bid for the 2016 Republican presidential nomination, started to accept bitcoin donations in April this year. The Washington Post called his decision to accept donations in the digital currency a "genius political move".

However, during a TechCrunch panel earlier this year, Paul said he was "an outlier" on "the bitcoin things".

That might have something to do with the reason he didn’t win the nomination…. Maybe he just wasn’t Libertarian enough. In a Bloomberg News report, he was quoted to say, "I've been fascinated by the concept of it, but I never would have purchased it myself. I'm just a little bit skeptical."

So, there are probably other politicians who are slowly evolving a positive attitude toward bitcoin and cryptocurrency if for no other reason than their hope that it might keep their sorry asses in office. Whatever happens, you can bet that as public awareness and favorability it increases, most of them will see it as a politically expedient bandwagon to jump on.

Trumps recent statements and appointments are indeed a positive thing but exactly when, where, and how the components of Trump’s administration will fall into place remains to be seen as does precisely how his new administration will deal with the massive tactical problem of (as he says) “draining the swamp”.

To say that there is a lot of inertia in the federal bureaucracy, the upper echelons of Wall Street and the global banking industry, and the US “presstitute media” would be an understatement. Such massive anti-freedom, anti-capitalistic, anti-libertarian machines as have evolved over the recent several US political administrations will take an equally long time to unravel and properly reconstruct, if for no reason other than the fact that it will take time to ferret out the dormant agents of the old regime and its way of thinking. They will not ‘go quietly’.

A few observers are speculating that Trump might try to pull a rabbit out of the federal hat by taking the US economy toward some kind of bitcoin-based monetary system.  

That’s possible but, as far as it goes, there aren’t any indications that such a move is being seriously considered…yet. Plus, it’s doubtful that the existing government bureaucracy would eagerly cooperate with something so totally libertarian.

One notable speaker, author, and economic forecaster, Doug Casey, has conjectured that the US government’s only possible way to avert a total collapse of the overly debt-burdened US economy would be to come out with a federally sponsored and/or designed version of cryptocurrency… which Mr. Casey conceptually calls, “Fed Coin”. See my recent article about Fed Coin and Mr. Casey.

I agree that Trumps appointments are looking interesting but I also think it’s still too early to start popping champaign corks about what it means for bitcoin and cryptocurrency in general. For the time being, the future of such things is still in the hands of private sector entrepreneurs. Whatever the Trump administration might try to do, the devil is still in the details. And the solution to the world’s money problems are still TBA (To Be Announced).
 

Art Williams
Freelance Writer
Case Studies and eMail Copywriting
eMail Me here

 

Can Your Cryptocurrency Be Hacked?

How Safe Is Your Cryptocurrency?

It’s not necessary to understand all the ins and outs of aerodynamics in order to have enough confidence to take an airplane trip (in an airplane weighing several tons) without being nervous that the plane could fall out of the air. To some extent that same type of confidence also applies to anybody getting involved in cryptocurrency, i.e. there’s a lot of technology behind it cryptocurrency but the average user doesn’t know or care to know those minute details.

However, some questions for some subjects are worth a little more digging and one of those questions is, “Can cryptocurrency be hacked?”

The short answer is, “Yes, but it’s more likely that an airplane would fall out of the sky and land on a big pile of cotton candy and everybody gets a free ticket to the circus and a picture of themselves with Bozo the Clown and Eeka The Jungle Girl sitting on top of a pink elephant.”

But understanding why cryptocurrency doesn’t have any significant ‘off the wall’ risk is interesting because lots of people are very curious about it and are looking for enough logic to quell their emotional fear of it (cryptocurrency).

I found a good explanation on Quora and some other places today and I’m going to recycle it here because I think it’s good information to know when you talk to people who know almost nothing about cryptocurrency and for whom the ‘opportunity glass’ is always half-empty rather than half-full.

Here’s the answer:

The primary innovation beyond Bitcoin is not the currency but rather the underlying technology, …the blockchain. In its basic sense, the blockchain is nothing more than a ledger.

Yeah, a ledger. Just like you accounts used to make entries in. The blockchain just the digital version of that tool but in an entirely new, much more secure and feature-rich way.

But what about the security of those transactions on that ledger?

That security problem is solved by various aspects of the blockchain process. Not the least of which is the Public Key and the Private Key which is required to authenticate each cryptocurrency transaction on the blockchain.

Theoretically cryptocurrencies can be stolen but it is virtually impossible to do so because the sophistication of the complex algorithms and public and private key cryptography involved wherein a private key is required to use the bitcoins stored in an address (public key).

Theoretically, 2^160 bitcoins addresses (public keys) are possible. And each public key has 2^58 possible private keys. This is where things get tough. The number 2^160 is a gigantic number with 48 digits in it. Just think how big it is. And the number is:

1461501637330902918203684832716283019655932542976

So…you can see you’re more likely to get that autographed picture with Bozo and Eeka than get your cryptocurrency hacked or stolen.

The other way to do this is to hack a wallet. There are lots of those in the market and they can be hacked if somebody somehow gets access to your email ID or password. Just like somebody could get into your locker at school if they had the combination to your padlock (remember those!!?)

If it isn’t already, eWallet hacking is probably going to become a very large underground industry. Your personal diligence is very important.

Of course, a thumb-drive with your cryptocurrency data, kept in a safe somewhere is also a possibility and obviously they are not susceptible to electronic hacking once disconnected from the internet. You can even have a paper wallet, i.e. keep that info in handwritten form.

E-Wallet security is an industry that will grow parallel with cryptocurrency. But for now…. Don’t worry about Bozo, Eeka, feeding the elephant, or the airplane falling out of the sky….or getting your cryptocurrency hacked.

None of those events are likely to happen.

 

Art Williams
Freelance Writer
Case Studies and Email copywriter

 

Cryptocurrency Metrics – Are There Any Good Ones?

Cryptocurrency Metrics – Are There Any Good Ones?

 

I don’t claim to be a cryptocurrency guro nor do I play one on TV. But I do know a little bit about basic marketing and business metrics and now that I have recently gotten interested in Bitcoin and cryptocurrency it occurred to me to see if there were meaningful metrics to help me choose among the multitude of cryptocurrencies I’ve encountered in the market.

My thinking was that, ‘If this question comes to my mind, it might be of concern or interest to other newbies in the cryptocurrency market too.”

So here’s what I found (or didn’t find) today. Are there any commonly used terms and metrics that a beginner-level cryptocurrency buyer can use to evaluate and differentiate between cryptocurrency choices?

The short answer seems to me to be, “No…not really.”

Whereas traditional business accounting has such measurements as:

Debt to equity ratios

Total Debt to Asset Ratio

Accounts receivable turnover

Accounts payable turnover

Current Ratio

Working Capital

Working Capital

Net Profit

Operating Margin
Accounts Receivable
Accounts Payable
..and others…

…..I couldn’t find anything similar for cryptocurrencies except one term… “Market Capitalization” or Market Cap.

And even for that term, the definition used for stocks (i.e. equities) can’t be directly applied to cryptocurrencies because cryptocurrencies and equity stock are two different animals.

Whereas the standard definition for Market Capitalization in equities markets is, ‘The amount of dollars per share of company stock times the number of shares’, the most logical comparison I could come up with in applying that definition to cryptocurrencies was, “the current prices per coin times the number of coins in circulation”. I couldn’t find anything more specific.

So, what signals or metrics could or should a prospective cryptocurrency purchaser use?

First of all, it probably should not be just one metric. While market cap is probably one reasonably good metric (of popularity and/or tenure in the market), there could also be other profile factors to pay attention to.

Liquidity, i.e. the number of buyers and sellers in the market could be important. Especially for traders rather than long-term investors. While I did not see the term, Liquidity, listed on any charts, I did see the term mentioned in some coin reviews.

Related terms could be “available supply” and “volume”.

Transaction fees might sometimes be a factor when purchasing cryptocurrency from an exchange. I saw that term mentioned in some reviews of alt coins but it wasn’t listed on any charts that I found.

The term Nodes has something to do with the processing time of buying and selling of cryptocurrency and and that might be a factor for active traders. And I did see the term listed in some alt coin reviews. But again…it wasn’t prominant on any charts that I found.

The term Difficulty has something to do with security issues and transaction processing time and I gather that this factor varies from coin to coin. But again, it was listed in some coin reviews but didn’t seem be a prominant consumer concern. It is related to the maximum allowed number in a given numerical portion of a transaction block’s hash. The lower the number, the more difficult it is to produce a hash value that fits it.

Bitcoin Price Index (BPI) is a term you might come across where the information provider wants to give you a graphic illustration of some particular cryptocurrency factor, e.g. trading volume, market buys or sells per 24 hour period, etc. An “index” could relate to many factors other than price.

Bitcoin Market Potential Index (BMPI) This metric is subjective but could be relevant if the buyer was concerned with a particular market characteristic. An ‘index’ could, theoreticaly, be constructed to help the reader make a conclusion based on those narrowly defined factors.

Bitcoin Sentiment Index (BSI) . This factor is, like the one above, probably subjective but might be valuable at least a relative sense.

Liquidity. This is probably a good term to watch for. And you will see it on some coin charts and reviews. The ability to buy and sell an asset easily via a suitably large community of buyers and sellers is important for liquidity. The result of an illiquid market is price volatility, and the inability to easily determine the value of an asset.

As you can see, there’s not a whole lot to sink your teeth into when you’re trying to understand what a good coin is vs. what a bad coin is. And the problem can be compounded even further when you discover that some coins were not even created for consumer-type purposes.

So what’s the answer?

You just don’t have the same kind of Quick and EZ Guide To CryptoCurrency Riches that you do in more mature subjects (e.g. Bass Fishing, Golf, Learning Spanish). But it seems to me that the best answer is:

  • Don’t move too fast.

  • Do as much research as you can.

  • Ask a lot of questions but be sure you ask people who can respect.

  • Try to pick your ‘plays’ based at least on what you might have in common with people who’ve made the same play, i.e. if you’re a middle-income working-guy, try to find out what coins similar people have bought (and been happy with). Don’t buy a coin just because some finance guy you read about in some far-off financial capital (who is probably in an income bracket 3 levels higher than you) bought.

  • Start small.

  • Don’t rob your kid’s piggybank. Take the risk from your budget.

The good news is that a rising tide floats all boats and many people have a mix of worry and optimism right now. On the one hand many people are optimistic for the US and world economy (due in no small part to the recent election of D.Trump). On the other hand, more and more people are realizing that old-fashioned money and banking practices are a game they’ll never win and they are starting to see that crytocurrency looks like a viable answer to their problems.

Luckily… it’s early in this incredible cryptocurrency phenomenon and you’ve got time to win big. Just take it seriously. The stakes are very high.
 

Art Williams
Freelance writer
Case Studies and eMail Copywriting

 

Hitchhikers Guide To Cryptocurrency Terminology

Hitchhikers Guide to Cryptocurrency Terminology

 

Just as I’ve often marveled at how many internet gurus take it for granted that the average person is familiar with Microsoft Word, I think the same situation will probably develop as Bitcoin and other cryptocurrencies get more into the mainstream of society and people encounter a whole new terminology they are not familiar with.

So, as a public service, here’s my non-academic, non-professional survey of some terminology that you either will need to know, might need to know, or might enjoy knowing as cryptocurrency becomes a part of your life.

Alt Coin

It has been said that ‘imitation is the sincerest form of flattery’ and there have been plenty of groups who have come out with their own imitations of Bitcoin. Some have been more successful than others but here is a list of several of the more successful ‘alternate’ cryptocoin patterned after Bitcoin to one degree or the other. Keep in mind that alt coin pundits can be pretty snarky in their opinions and alt coins are not all created for the same purpose or by the same means. As for which one is, “x” (where x is a particular attribute)… the answer is, “It all depends.”

Litecoin

Peercoin

Namecoin

Quarkcoin

Primecoin

Novacoin

Feathercoin

Zetacoin

MyCrytoCoin

Digitalcoin

Dogecoin

Stablecoin

Ethereum

Ripple

Bitcoin

The original cryptocurrency launched in 2009 and based on a scholarly paper released on the internet by a mysterious figure, or possibly group of people, going by the name of Satoshi Nakamoto. Some people doubt that the originator was Japanese. Nevertheless, the paper was titled Bitcoin: A Peer-to-Peer Electronic Cash System. In January 2009, Nakamoto released the first bitcoin software, open source, that launched the bitcoin network. The first units of the bitcoin cryptocurrency were called bitcoins. Note: “Bitcoin” is the network and “bitcoin” is the payment unit used in that network.

 

Cryptocurrency (also cryptocoin)

A digital asset designed to work as a medium of exchange using cryptography to implement and secure the transactions and to control the creation of additional units of the currency. In practical terms for the consumer… cryptocurrency is digital money used for the same things traditional money is used for… except with certain advantages over traditional money. All bitcoins are cryptocurrency but not all cryptocurrency is Bitcoin.

IBAN

The International Bank Account Number is a unique identifier helping banks process payments from person to person automatically. The IBAN contains all necessary information of the owner if a bank account such as the account number, bank and branch information and country code. Since the processes for transferring bank funds into cryptocurrencies can sometimes still be rather rigorous and tedious, this number could be seen on some paperwork.

Bank Secrecy Act

This fine work of legislative art, The Bank Secrecy Act of 1970 (otherwise known as the Currency and Foreign Transactions Reporting Act) requires financial institutions in the United States to assist U.S. government agencies to detect and prevent money laundering (as if the NSA wasn’t enough). Specifically, the act requires financial institutions to keep records of cash purchases of negotiable instruments, and file reports of cash purchases of these negotiable instruments of more than $10,000 (daily aggregate amount), and to report suspicious activity that might signify money laundering, tax evasion, or other criminal activities. Of course, in periods of inflation, even a trip to 7-11 approaches this criminal parameter thus conveniently making almost everybody a criminal.

BBAN

Basic Bank Account Number. It represents a country-specific bank account number. The BBAN is the last part of the IBAN when used for international funds transfers. The average cryptocurrency user or purchaser may see it on a form.

BIC

Bank Identifier Code… an international code that banks use for financial transactions. Each bank has its own BIC. Also known as SWIft CODE. Could be 8 or 11 characters.

FinCEN

FinCEN is the federal agency principally charged with combatting money laundering and financial crimes. A feat they accomplish primarily through the regulation of banks and related entities, or “Money Services Businesses” (“MSBs”).

Hash

AKA: hashing or hash function. Hashing isn’t directly relative to a consumer’s use of cryptocurrency but it is a word that pops up a lot when looking at descriptions of various cryptocurrencies. It refers to a security protocol whereby a data string is jumbled up (i.e. like real “hash”) at the sender-end and then put back together at the receiver-end. Both results should match of course. Just like in the kitchen, there are different kinds of hashes.

Keys (or Crypto Keys)

In the world of cryptocurrency, ‘keys’ are small strings of alphanumeric data used to unlock a larger piece of code relating to a cryptocurrency transaction. Keys are either Public or Private and are very important to the success and security of cryptocurrency systems and processes.

KYC

An acronym for “Know Your Client/Customer” and referring to a large body of rules and regulations enacted and enforced by governments on financial institutions to presumably prevent them from doing business with criminals and terrorists. The two main facets of KYC rules are (1) traceability and (2) identification verification.

Mixing Service

A service that mixes your bitcoins with someone else's, sending you back bitcoins with different inputs and outputs from the ones that you sent to it. A mixing service (also known as a tumbler) preserves your privacy because it stops people tracing a particular bitcoin to you. It also has the potential to be used for money laundering. For some users and in some scenarios, mixing is a desirable feature because it adds extra layer of anonymity to a transaction.

mBTC

1 thousandth of a bitcoin (0.001 BTC).

OTC Exchange

An exchange in which traders make deals with each other directly, rather than relying on a central exchange to mediate between them.

Public Key

An alphanumeric string which is publicly known and unique to each transaction. This key is used in conjunction with your Private Key to complete a transaction.

Pump and Dump

Inflating the value of a financial asset that has been produced or acquired cheaply, using aggressive publicity and often misleading statements. The publicity causes others to acquire the asset, forcing up its value. When the value is high enough, the perpetrator sells their assets, cashing in and flooding the market, which causes the value to crash. This can and has happened with some alt coins and MLM cryptocoin scams.

PSP

Not a video game system but rather a Payment Services Provider. This is not a consciously important term for the average cryptocurrency user but is important to merchants who want to accept cryptocurrency…much in the same way that merchants need a ‘merchant account’ to accept Visa, Mastercard, or other credit or debit cards. Cryptocurrency PSP’s are ‘hot’ financial services right now. Note: The MyCryptoWorld block chain, when released, will incorporate all the features of PSPs for merchants and will be a very-much ‘game-changing’ development in the cryptocurrency ecosystem.

Private Key

An alphanumeric string kept secret by the user, and designed to sign or authenticate a digital communication when combined with a public key.

Paper Wallet

A ‘Paper Wallet’ is the physical equivalent of a digital or e-wallet. It is a printed sheet containing one or more public bitcoin addresses and their corresponding private keys. It is often used to store bitcoins securely, instead of using software wallets which can be corrupted or web wallets which can be hacked or simply disappear. They are useful but require great accuracy and security.

SEPA

The Single European Payments Area. A payment integration agreement within the European Union, designed to make it easier to transfer funds between different banks and nations in euros.

Silk Road

An underground online marketplace, generally used for illicit purchases, often with cryptocurrencies such as bitcoin. Silk Road was shut down in early October 2013 by the FBI after owner Ross Ulbricht was arrested. Ulbricht was later convicted on money laundering and drug distribution charges.

 

Scamcoin

An altcoin produced with the sole purpose of making money for the originator. Scamcoins frequently use pump and dump techniques and pre-mining together. A great conversation starter at a party: “Hey, have you bought any Scamcoin yet!?”

Satoshi Nakamoto

The name used by the original inventor of the Bitcoin protocol, who withdrew from the project at the end of 2010. Not to be confused with Sasushi Nakamoto who owns a sushi restaurant in Los Angeles.

Satoshi

The last name of the mythical inventor of Bitcoin but also used to denote the smallest subdivision of a bitcoin currently available (0.00000001 BTC).

Transaction Fee

A small fee imposed on some transactions sent across the bitcoin network. The transaction fee is awarded to the miner that successfully hashes the block containing the relevant transaction. Cryptocurrency transactions fees are miniscule in comparason to transaction fees in traditional banking channels. Thus no wonder that banks and ‘banking families’ are very sceptical of cryptocurrencies.

Transaction block

A collection of transactions on the bitcoin network, gathered into a block that can then be hashed and added to the blockchain.

TOR

An very robust, effective, and anonymous internet data routing protocol, used by people wanting to hide their identity online.

QR Code

A two-dimensional graphical block containing a monochromatic pattern representing a sequence of data. QR codes are designed to be scanned by cameras, including those found in mobile phones, and are frequently used to encode bitcoin addresses. QR codes are frequently used in the buying and selling of cryptocurrencies via smartphone.

uBTC

One microbitcoin (0.000001 BTC)

Wallet

A method of storing bitcoins for later use. A wallet holds the private keys associated with bitcoin addresses. The blockchain is the record of the bitcoin amounts associated with those addresses.

So, that’s a starter Primer for your Bitcoin and/or cryptocurrency adventure. Of course this document is meant more to the benefit of Beginners but I do plan on updating it as time goes by because I know that getting into cryptocurrency can be a bit intimidating at first.

If you encounter a term that you think should be highlighted and clearly defined in future revisions of this list, please let me know at 713 701 1853, xpatflipper@gmail.com, or by joining Markethive, the free community for Entrepreneurs (for free… here) and connecting with me there.

 

Art Williams
Freelance Writer
Case Studies and Email Copywriting

 

 

Trump Picks Cryptocurrency and Blockchain Advocate as Budget Chief

Trump Picks Cryptocurrency and Blockchain
Advocate as Budget Chief

Bitcoin Caucus co-founder Mick Mulvaney is the US'
next Director of Office of Management and Budget.

It seems the election of Donald Trump could spell great news for American blockchain startups and cryptocurrency users. President-elect Trump has added to his cabinet an active and vocal supporter of cryptocurrencies and blockchain which means that there will be at least one powerful voice in the US government that will resist further efforts to legislate the technology into oblivion.

Trump picked Congressman Mick Mulvaney, Tea Party Republican, as his administration’s Director of Office of Management and Budget. He is considered a staunch fiscal conservative that wishes to drastically limit the federal government’s spending on social programs.

Just this September he was among the founders of the bipartisan Blockchain Caucus. Commonly called the Bitcoin Caucus by American media, it is meant to help congressmen stay up to speed on cryptocurrency and blockchain technologies, and develop policies that advance them.

Mick Mulvaney

“Blockchain technology has the potential to revolutionize the financial services industry, the U.S. economy and the delivery of government services, and I am proud to be involved with this initiative,” Mulvaney said in a statement back then.

Mulvaney is also a supporter of Coin Center, a non-profit research and advocacy center focused on public policy issues facing cryptocurrency technologies, which raised over $1 million earlier this year.

“For the past two years we have worked with Representatives Mulvaney and Polis to educate their colleagues through briefings and other events, and the new Congressional Blockchain Caucus will be a wonderful new platform to continue these efforts,” Jerry Brito, executive director of Coin Center said at the time. “Their forward-thinking leadership on blockchain technology in Congress is unmatched.”

 

Thomas Prendergast
CEO
Markethive Inc.

Join our Bitcoin Group. Time is running out.

https://markethive.com/group/cryptocoin

Excuse Us…Perhaps You’d Like some Fed-Coin?

Fed Coin – The Government’s Cyber-Swindle?

Does the US government have a shady knock-off of Bitcoin (BTC) up their sleeve to cope with the increasingly likely collapse of the US dollar? Doug Casey thinks they might.

Doug Casey is a writer, speculator, and the founder and chairman of Casey Research. He describes himself as an anarcho-capitalist influenced by the works of novelist Ayn Rand. Doug has a very prescient hypothesis of how the US government, and indeed world governments, might try to solve their debt and currency-value problems.

Mr. Casey’s idea is within the realm of possibility and smart patriots, citizens, and consumers would be wise to, as the Bible says, “Pay attention!”.

First of all, we must recognize the reality that although the US dollar is still fairly well regarded internationally, that’s only because it’s living off of the reputable reputation it once had. See this article.

But don’t delude yourself that lots of countries haven’t been looking for currency and financial system alternatives. They have.

In fact, a growing number of countries have already taken proactive action to set up their own international settlements network that bypasses the New York City banks. These countries are already starting to trade in their own currencies.

This group of countries is known as BRICs ( Brazil, Russia, India, China, and S.Africa) and is described in Wikipedia in the following manner:

“In the aftermath of the Yekaterinburg summit, the BRIC nations announced the need for a new global reserve currency, which would have to be "diverse, stable and predictable". Although the statement that was released did not directly criticize the perceived "dominance" of the US dollar – something that Russia had criticized in the past – it did spark a fall in the value of the dollar against other major currencies.”

Some background to the chain of events which led up to this point: Since the US dollar went off the gold standard and US coinage lost all silver content by the mid 70’s to mid 80's, US currency has barely been worth the paper it is printed on or the value of the base metal it is minted with.

The only thing that has kept the US economy afloat, other that the fact that the US has been pretty good at intimidating and destabilizing other countries, is the ability unique situation whereby the Fed can print all the money it wants, America does have a large consumer base, and other countries have been dumb enough to take it our worthless dollars in return for the merchandise they manufacture and ship to us.

But accepting US ‘funny money’ is like building a skyscraper with fake steel. Such a structure is inherently unstable and nobody in their right mind would want to rent on one of the upper floors. Foreign governments are realizing that US dollars, especially with the US government influence that comes packaged with it, is not a smart deal.

So what would happen if foreigners stopped taking US dollars for their ‘stuff’? Today, there are multiple economic scenarious that could bring the US economy down. And of course when the US economy fails, the rest of the world would suffer too. Everybody except the politicians of course.

Many experts have quietly been warning for several years that one such precipitous event could be a collapse of the US derivatives market. Although derivatives might theoretically be a sound financial product in some circumstances, the problem with most derivatives, especially in the US, is that most of them are based on lousy collateral.

Lots of foreign governments also own US derivatives. And when these governments eventually decide they don’t want to refinance their US debt securities anymore and would prefer to take their money and do something else with it…the US won’t be able to comply with that request because it simply doesn’t have the cash.

A derivatives crash, or anything of similar scope which might cause a run on the US banking system, would be bad news not only for America but also for the world economy.

US banks don’t have enough cash to cover all the debt they’ve issued. No US bank, including the Fed, even meets its own reserve requirements.   

In such an event, even if the US government resorted to printing more of the worthless money they’ve been printing for several years, it would be a practical impossibility to print the amount needed. And that presumes that debtors would even want US “dollars” at that point…. Which they probably wouldn’t.

This looming catastrophe has been in plain view for several years now.

To summarize the problem to this point: US currency is worth nothing, the US government is up to its eyeballs in debt, there is growing suspicion and outright lack of confidence in US geopolitics and the US economy (e.g. we don’t ‘make’ anything anymore except war), the US middle class is ‘feeling the pinch’ and they’re not very happy about it, the US has a bloated and unproductive bureaucracy and and welfare class, and the list goes on.

So, if you’re in the government, there’s not much to be positive about economically. Unless you think you can ‘dance between the hailstones´.

Enter Bitcoin (BTC) and Mr. Casey’s theory: Since US cash is worthless, what if the government tried to come out with their own version of Bitcoin? Wouldn’t that tend to reset the clock and buy them more time to kick the can down the road?

Could such a nefarious scheme actually work?

Yes, it could. It all depends on how it would be packaged to the public and whether the public accepted it.

What would the government have to do to pull off a ‘caper’ like this?

First of all, they would push the mantra that ‘government is good’ and ‘market forces’ are bad.

Next it would enact laws ‘to protect the public’. These laws would probably favor their plan over the private market option (i.e. BTC et.al.). Similar to what the Indian government is doing now with gold ownership laws…ostensibly to protect Indians. See that article here.

Simultaneously they would use their influence with the vestiges of the almost obsolete US banking industry to regulate or curtail conversion between the cryptocurrency domain and traditional types of ‘money’ in the US. They would use regulatory powers to make Bitcoin, Dogecoin, et.al. more difficult to use.

Also they would probably become more intrusive into the citizen's cyberspace…including trying to control capital flight from the US.

And of course, they would use their power to try to throw in some proprietary ‘perks’ to their “Fed Coin” scheme to make it more attractive than alternate type of cryptocurrency.

They could have other tricks up their sleeve. Don't be surprised if they even try to tie Fed Coin in with anti-terrorism. But Mr.Casey’s point is valid: The government might figure, “If we can’t beat’em….join 'em!”

“Fed Coin.”

It sorta has a patriotic, SuperHero ring to it, doesn’t it?

Don’t fall for it. Fed Coin: Bad. Bitcoin: Good.